The Sharing Economy Can Save the City

San Francisco wants to ban the developers of the MonkeyParking iPhone application from letting users auction their parking spots. The young Italian team headed by Paolo Dobrowolny defiantly continues with the service. This looks like another case of authorities battling the sharing economy, like Brussels banning Uber or Berlin frowning on Airbnb. There is more to the MonkeyParking case, however: The young technologists are offering a service the city should have implemented itself rather than obstructing.

If people with a public transport aversion go to hell, it looks like San Francisco. The Municipal Transportation Agency proudly reported last week that a pilot project of the federally-funded SF Park system, which raises parking prices at peak times and lowers them when demand declines, reduced parking search time "by five minutes, or 43 percent" in areas where it was tested. That means drivers still had to search for almost 7 minutes to find a spot. MonkeyParking, which [IS EMPLOYED?] in the Italian capital, Rome -- we won't call it a circle of hell, if only because it's home to the Holy See -- offered a solution: Before leaving a parking spot, a user could put it up for auction.

Would people actually pay $5, $10, $20 to save 7 minutes of their time? MonkeyParking, which started its pilot phase in San Francisco in March, discovered that yes, they would. Though the developers do not yet take a commission on the money changing hands through the app, they have no intention of honoring the city's cease-and-desist letter. Dobrowolny says users are selling only information that a desired spot is about to come free -- not the spot itself. Under the First Amendment, they have a right to exchange such information, for money or otherwise.

This appears to be a case of what my colleague Megan McArdle dubbed the Rumpelstiltskin gambit -- "build something illegal but add some elaborate wrinkle that allows you to claim you're within the law." Courts may not be swayed by Dobrowolny's free-speech argument: An auction holder may not vacate her parking spot until she is paid for it, so there is surely commerce built into the "information" business. Someone with a car and a lot of time on his hands could just drive around town at peak hours, occupy parking spots and then auction them off. A veritable parking mafia could develop.

The city's own SF Park raises and lowers prices based on occupancy rates between 9 a.m and 6 p.m. on weekdays. The higher the occupancy rate for a given district, the more the city charges for a spot. It works stunningly well, serving both to reduce average prices and increase average occupancy. It has done little, however, to increase actual parking availability, which is not the same as occupancy. A high occupancy rate could be achieved by spreading parking time evenly throughout the day or by having all the spots occupied for a few hours. In a recent study of SF Park, two transportation analysts found no statistical relationship between parking price and the number of available spaces on a block. MonkeyParking offers an answer to that, by factoring human exchange into the equation.

Clearly, the parking spots are the city's to sell or give away, which is why it is up in arms, but that's no reason to thwart MonkeyParking's technological solution. Imagine the city running a MonkeyParking-like system. It would have the unique advantage of actually owning what is being sold. That would allow San Francisco (or any city) to prevent the mafia scenario: Instead of straight cash, it could offer discounts on future parking to drivers who auction their spaces. The municipality would not lose in the transaction, since the winning bidders would pay extra for parking. Search time would be reduced, and parking availability would increase. Drivers who do not hog space at peak times would not be charged higher fees.

I have no proof it would actually work, but San Francisco has no proof it wouldn't. Municipal authorities and governments should take a more serious look at the ideas offered by mesh economy pioneers. Many have the potential to alleviate redistribution and scarcity problems. If only the bureaucrats would let them.

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